So, if you purchase a Tier 5 drug - or even a Tier 1 generic - or a Tier 2 Preferred Multi-Source drug in the Coverage Gap, you will receive the Donut Hole discount of 75% (you pay 25% of retail).
- The only difference is that when you purchase generic drugs in the Donut Hole you get credit for the 25% you paid out-of-pocket toward meeting your out-of-pocket limit (RxMOOP) and exiting the Donut Hole.
- However, when you purchase a brand-name drug in the Donut Hole, you will receive the brand-name Donut Hole discount of 75% (you pay 25% of retail) - and with brand-name drugs you get credit for 95% of the retail drug price (the 25% you pay plus the 70% that the brand-name pharmaceutical drug manufacturer pays) toward meeting your out-of-pocket threshold (RxMOOP) and exiting the Donut Hole.
For example, if your Medicare Part D plan covers the weight loss drug Wegovy® for plan member who also have additional accepted medical indications (such as a chronic heart conditions or diabetes), your medication may be covered as a Tier 5 Specialty Drug with 33% cost-sharing and a $1,400 retail cost. So, when you reach the Donut Hole, you will pay 25% of the retail price ($350) and receive credit toward exiting the Donut Hole of 95% of the retail drug price or $1,330.
Important Update: 2024 is the last year for the Coverage Gap or Donut Hole. Starting in 2025, the Donut Hole will no longer be a part of your Medicare Part D coverage.
Starting in 2025, the Inflation Reduction Act (IRA) eliminates the Coverage Gap (Donut Hole). In 2025 and beyond, Medicare Part D beneficiaries will stay in the Initial Coverage phase until their out-of-pocket spending for Part D formulary drugs (TrOOP) reaches the maximum out-of-pocket spending limit for Part D formulary drugs (RxMOOP) - which is set at $2,000 for 2025. After reaching RxMOOP, Medicare Part D beneficiaries will enter Catastrophic Coverage and have a $0 copay (no additional costs) for all formulary Medicare Part D drugs through the remainder of the year.
2025 Medicare Part D coverage
